IENova Rally Stoked as Deutsche Bank Says Buy: Mexico City Mover

May 6 (Bloomberg) -- Infraestructura Energetica Nova SAB,
the Mexican unit of U.S. natural-gas utility Sempra Energy, rose
to a record as Deutsche Bank AG recommended buying the shares.

IENova, as the Mexico City-based company is also known,
advanced 2.3 percent to 44.81 pesos today. It has rallied 32
percent since its initial public offering in March, or about 35
percent in dollar terms, exceeding returns for all 144 stocks on
the MSCI Emerging Markets Latin America Index, according to data
compiled by Bloomberg.

The company will get a boost from contracts to build
pipelines in northern Mexico, helping fuel a projected 14
percent compound annual growth rate in earnings, Deutsche Bank
analysts including Curt Launer wrote in a research report dated
today. Two projects in the state of Sonora, which borders
Arizona, will cost $925 million and generate $105 million in
earnings before interest, taxes, depreciation and amortization
in their first year of operation, according to Deutsche Bank.

IENova “has contracted out virtually all of the capacity
of its assets across its business segments under long-term
contracts which require its customers to pay regardless of
whether they actually use their contracted capacity,” Deutsche
Bank said. “This helps provide the company with steady and
predictable long-term cash flows. Substantially all of these
contracts are with stable, creditworthy, private counterparties
or with state-owned entities.”